July 24, 2014

Altisource Announces Record Results

LUXEMBOURG, July 24, 2014 (GLOBE NEWSWIRE) -- Altisource Portfolio Solutions S.A. ("Altisource") (Nasdaq:ASPS) today reported record second quarter service revenue, net income attributable to shareholders and diluted earnings per share.

Second Quarter 2014 Results Compared to Second Quarter 2013:

  • Service revenue of $263.2 million, a 63% increase
  • Net income attributable to Altisource of $54.1 million, a 75% increase
  • Diluted earnings per share of $2.24, a 79% increase
  • Cash from operations of $75.2 million, a 30% increase

"Next month marks our five year anniversary as a stand-alone public company. During this five year period, we have had 43% cumulative annual service revenue growth, 47% cumulative annual earnings growth and have focused on providing best-in-class services, developing new services, driving down costs through efficiency initiatives and investing in our future. This is exactly what we set out to do five years ago," said Chairman William Erbey.

William Shepro, Chief Executive Officer, further commented, "We believe our strategic initiatives, coupled with our strong revenue, earnings and operating cash flow, position us for attractive growth in the next five years and beyond. We plan to continue to invest in our next generation technology, develop our newer services and pursue potential acquisitions, in line with our marketplace strategy. We also plan to continue our share repurchase program when the stock is trading at attractive prices."

Second quarter 2014 highlights include:

  • The average number of loans serviced by Ocwen on REALServicing was 2.3 million for the second quarter of 2014, an increase of 118% compared to the second quarter of 2013
  • The average number of delinquent non-Government-Sponsored Enterprise loans serviced by Ocwen on REALServicing was 352 thousand for the second quarter of 2014, an increase of 24% compared to the second quarter of 2013
  • We repurchased 0.4 million shares of our common stock under our stock repurchase program at an average price of $108.24 per share during the second quarter of 2014
  • Altisource Residential Corporation, the company we provide rental management services to, increased its non-performing loan and real estate owned portfolio from 12,405 at March 31, 2014 to 14,907 at June 30, 2014

Forward-Looking Statements

This press release contains forward-looking statements that involve a number of risks and uncertainties. Those forward-looking statements include all statements that are not historical fact, including statements about management's beliefs and expectations. Forward-looking statements are based on management's beliefs as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future economic performance and are not statements of historical fact, actual results may differ materially from those projected. The Company undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to: Altisource's ability to retain existing customers and attract new customers; general economic and market conditions; governmental regulations, taxes and policies; availability of adequate and timely sources of liquidity; and other risks and uncertainties detailed in the "Forward-Looking Statements," "Risk Factors" and other sections of the Company's Form 10-K and other filings with the Securities and Exchange Commission.

Webcast

Altisource will host a webcast at 11:00 a.m. EDT today to discuss our second quarter results. A link to the live audio webcast will be available on the Company's website through the Investor Relations home page.  Those who want to listen to the call should go to the website fifteen minutes prior to the call to register, download and install any necessary audio software. A replay of the conference call will be available via the website approximately two hours after the conclusion of the call and will remain available for approximately 30 days.

About Altisource

Altisource is a premier marketplace and transaction solutions provider for the real estate, mortgage and consumer debt industries offering both distribution and content. We leverage proprietary business process, vendor and electronic payment management software and behavioral science based analytics to improve outcomes for marketplace participants.  Additional information is available at www.altisource.com.

 
ALTISOURCE PORTFOLIO SOLUTIONS S.A.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
 
  Three months ended
June 30,
Six months ended
June 30,
  2014 2013 2014 2013
Service revenue        
Mortgage Services $ 188,477 $ 119,887 $ 334,971 $ 216,264
Financial Services 25,436 22,959 49,693 39,091
Technology Services 57,983 24,783 105,487 45,014
Eliminations (8,731) (5,955) (17,027) (11,143)
  263,165 161,674 473,124 289,226
Reimbursable expenses 32,276 23,299 61,071 43,565
Non-controlling interests 631 1,137 1,146 2,146
Total revenue 296,072 186,110 535,341 334,937
Cost of revenue 151,723 93,673 270,733 170,369
Reimbursable expenses 32,276 23,299 61,071 43,565
Gross profit 112,073 69,138 203,537 121,003
Selling, general and administrative expenses 49,021 29,828 92,555 48,508
Income from operations 63,052 39,310 110,982 72,495
Other income (expense), net:        
Interest expense (4,784) (4,902) (9,560) (8,114)
Other income (expense), net (43) 77 4 782
Total other income (expense), net (4,827) (4,825) (9,556) (7,332)
Income before income taxes and non-controlling interests 58,225 34,485 101,426 65,163
Income tax provision (3,493) (2,417) (6,548) (4,568)
Net income 54,732 32,068 94,878 60,595
Net income attributable to non-controlling interests (631) (1,137) (1,146) (2,146)
 
Net income attributable to Altisource
$ 54,101 $ 30,931 $ 93,732 $ 58,449
         
Earnings per share:        
Basic $ 2.45 $ 1.34 $ 4.20 $ 2.51
Diluted $ 2.24 $ 1.25 $ 3.84 $ 2.34
         
Weighted average shares outstanding:        
Basic 22,089 23,161 22,301 23,267
Diluted 24,166 24,823 24,415 24,940
         
         
ALTISOURCE PORTFOLIO SOLUTIONS S.A.
 
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
 
  June 30,   December 31,
  2014   2013
ASSETS
 
Current assets:
     
Cash and cash equivalents $ 127,884   $ 130,429
Accounts receivable, net 125,047   104,787
Prepaid expenses and other current assets 16,022   10,891
Deferred tax assets, net 2,837   2,837
 Total current assets 271,790   248,944
Premises and equipment, net 100,962   87,252
Deferred tax assets, net 160   622
Intangible assets, net 256,889   276,162
Goodwill 61,941   99,414
Other assets 19,258   17,658
       
Total assets $ 711,000   $ 730,052
 
LIABILITIES AND EQUITY
Current liabilities:      
Accounts payable and accrued expenses $ 102,686   $ 84,706
Current portion of long-term debt 3,975   3,975
Deferred revenue 21,785   36,742
Other current liabilities 8,957   10,131
 Total current liabilities 137,403   135,554
       
Long-term debt, less current portion 389,385   391,281
Other non-current liabilities 11,733   45,476
 
Equity:
     
Common stock ($1.00 par value; 100,000 shares authorized;
25,413 issued and 21,941 outstanding as of June 30, 2014;
25,413 issued and 22,629 outstanding as of December 31, 2013)
25,413   25,413
Additional paid-in capital 90,403   89,273
Retained earnings 330,361   239,561
Treasury stock, at cost (3,472 shares as of June 30, 2014 and
2,784 shares as of December 31, 2013)
(274,679)   (197,548)
 Altisource equity 171,498   156,699
       
Non-controlling interests 981   1,042
 Total equity 172,479   157,741
 
Total liabilities and equity
$ 711,000   $ 730,052
 
 
ALTISOURCE PORTFOLIO SOLUTIONS S.A.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
  Six months ended June 30,
  2014 2013
 
Cash flows from operating activities:
   
Net income $ 94,878 $ 60,595
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 13,375 9,306
Amortization of intangible assets 19,573 10,237
Changes in the fair value of Equator Earn Out (37,924) --
Goodwill impairment 37,473 --
Share-based compensation expense 1,130 1,519
Equity in losses of investment in affiliate -- 122
Bad debt expense 4,250 452
Amortization of debt discount 90 152
Amortization of debt issuance costs 483 451
Deferred income taxes 462 --
Loss on disposal of fixed assets 98 926
Changes in operating assets and liabilities, net of effects of acquisitions:    
Accounts receivable (24,510) (10,813)
Prepaid expenses and other current assets (5,131) (3,009)
Other assets (2,089) (1,440)
Accounts payable and accrued expenses 21,319 917
Other current and non-current liabilities (11,950) (1,947)
Net cash provided by operating activities 111,527 67,468
 
Cash flows from investing activities:
   
Additions to premises and equipment (30,522) (13,397)
Acquisition of businesses, net of cash acquired --  (215,700)
Proceeds from loan to Ocwen --  75,000
Proceeds from sale of equity affiliate -- 12,648
Other investing activities (294) (50)
Net cash used in investing activities (30,816) (141,499)
     
Cash flows from financing activities:    
Proceeds from issuance of long-term debt -- 201,000
Repayment of long-term debt and payments on capital lease obligations (1,986) (1,733)
Debt issuance costs -- (2,400)
Proceeds from stock option exercises 639 2,914
Purchase of treasury stock (80,702) (51,573)
Contributions from non-controlling interests -- 15
Distributions to non-controlling interests (1,207) (1,889)
Net cash (used in) provided by financing activities (83,256) 146,334
     
     
Net (decrease) increase in cash and cash equivalents (2,545) 72,303
Cash and cash equivalents at the beginning of the period 130,429 105,502
Cash and cash equivalents at the end of the period $ 127,884 $ 177,805
     
Supplemental cash flow information:    
Interest paid $ 9,074 $ 7,562
Income taxes paid, net 1,561 1,165
     
Non-cash investing and financing activities:    
(Decrease) increase in payables for purchases of premises and equipment $ (3,339) $ 891
(Decrease) increase in acquisition of businesses from subsequent working capital true-ups (3,711) 11,133
CONTACT: Michelle D. Esterman

         Chief Financial Officer

         T:  +352 2469 7950

         E:  Michelle.Esterman@altisource.lu
Source: Altisource Portfolio Solutions S.A.

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